Should Value Investors Buy H&E Equipment Services (HEES) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is H&E Equipment Services (HEES). HEES is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.77. This compares to its industry's average Forward P/E of 11.56. Over the last 12 months, HEES's Forward P/E has been as high as 14.03 and as low as 7.96, with a median of 10.63.
Investors should also note that HEES holds a PEG ratio of 0.73. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HEES's industry currently sports an average PEG of 0.92. HEES's PEG has been as high as 1.39 and as low as 0.35, with a median of 0.86, all within the past year.
Another notable valuation metric for HEES is its P/B ratio of 3.47. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.99. Within the past 52 weeks, HEES's P/B has been as high as 5.05 and as low as 2.85, with a median of 3.78.
Finally, investors should note that HEES has a P/CF ratio of 3.05. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.47. Within the past 12 months, HEES's P/CF has been as high as 4.63 and as low as 2.53, with a median of 3.35.
These are just a handful of the figures considered in H&E Equipment Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HEES is an impressive value stock right now.
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H&E Equipment Services, Inc. (HEES) : Free Stock Analysis Report
